DIE ERSTE österreichische Spar-Casse ... - ERSTE Stiftung

Capital gains
Income from the sale of securities issued in Austria is subject to (personal/corporate) income
tax in Slovakia if the recipient is a Slovak resident. Such income should be included in the
taxpayer's income tax base.
When considering the taxation of the sale of securities the source of which is in Austria, the
provisions of the existing double taxation treaty between Austria and the Slovak Republic
should be taken into consideration. Under the provisions of this double taxation treaty capital
gains from the sale of such securities are in general taxable only in the Slovak Republic. The
income tax is levied as follows:
Individual investors holding the Notes as a non-business asset
Capital gains from the sale of the Notes are subject to personal income tax at a flat rate of
19%. A loss from the sale of the Notes shall not be offset against gains from the sale of the
Notes or other securities in the same fiscal period - only the expenses up to the amount of
income shall be considered upon the calculation of the tax base.
The tax base shall be equal to the taxable income less any expenses, which may be
documented as having been incurred in order to generate the income. Expenses that can be
deducted are the purchase price proven to be paid for the Notes, or when there is no
purchase then the price for the Notes determined at the time when the Notes were acquired,
and the expenses related to the acquisition or purchase of the Notes.
Capital gains from the sale of the Notes will be exempt from Slovak personal income tax if the
aggregate of the tax base related to the "other income" category (i.e. debentures, shares, bills
of exchange etc.) does not exceed the flat amount of EUR 500 (effective as of January 1,
2011). The same limit for exemption relates to rental income, income from the transfer of
options, income from the transfer of an interest in a company etc. If the above mentioned limit
is exceeded, only the excess amount is included in the tax base.
Individual investors holding the Notes as a business asset
In the Slovak Republic there is no difference between the tax rate for individuals and
corporations. Capital gains from the sale of the Notes are included in the personal income tax
base and taxed at a flat rate of 19%.
In the case of the sale of securities, a loss is generally treated as a tax non-deductible
expense. However, a loss from the sale of the Notes may be offset against the gains from the
sale of the Notes or other securities in the same fiscal period.
Under the following conditions the loss incurred is entirely accepted as a tax deductible
expense: (i) securities traded at a stock exchange, the acquisition cost of which is not higher,
and the proceeds from the sale of which are not lower than a deviation of 10% from the
average quotation published by the stock exchange on the date of purchase or sale, or, if the
securities are not traded on such a date, from the last published average quotation; as
regards the securities above, the expense shall be equal to the acquisition cost of shares, or,
with respect to other securities, the acquisition cost adjusted by the valuation difference
arising out of valuation at the fair market price which is included in the tax base; (ii) bonds, the
selling price of which is not lower by more than the interest accrued on the bonds and
included in the tax base prior to the date of sale or the date of maturity of the bond; and (iii)
for taxable parties which are engaged in the trading with securities pursuant to special
legislation, and which may deduct the expense of the acquisition of securities up to the
amount posted as their cost.
Corporations
Page 87